🎣 Shipper Updates

Happy National Leave the Office Early Day. We didn't even know such a holiday existed till today, but here you go. You now have permission to leave the office early today. Just don't blame us if you get fired.

🤔 Question of the Day: Which retailer is projected to capture the highest percentage of digital grocery sales this year? Find the answer in today's main story.

TOP LANE MOVERS POWERED BY GREENSCREENS.AI

*Greenscreens.ai, forecasts real-time truckload buy prices that are suited to each freight brokerage's purchasing power using AI and machine learning. Its engine takes into account over 130 attributes and data points in each rate forecast.

🐔 WHAT’S COOKIN’ IN FREIGHT

🚛 What Does Kevin Nolan Think of Chicago Based Carriers? Kevin Nolan, the mastermind behind NTG, dropped by "Freight Gong Friday" to dish out some praise for Chicago trucking companies. Once tagged as "Sketchyville," Chicago’s truckers have stepped up, gaining industry respect. Nolan recently mingled with Eastern European drivers at Sky Spa Sauna in Buffalo Grove, IL, and came away impressed. “Fifteen years ago, the Chicagoland trucker was looked at as like sketchyville, right? Sketchyville USA. Not anymore. They have proven themselves and are now a vital part of the trucking community,” Nolan said. Keep an eye out—he might be back for more sauna sessions.

📉 Freight Brokerage Blues. As the industry continues to right itself, 2024 continues to be rough on freight brokerages, with net change in growth declining each month. April 2024 notably saw that number decrease by 414 active brokerages. Most recent data shows there was a decrease of 265 as of June. Kevin Hill of Brush Pass Research says without relief, this year could go down in history as "The Great Freight Depression."

📈 Spot Market: South is Up, North is Down. Greenscreens.ai’s May 2024 Spot Market Update shows a clear regional divide in freight rates. Southern markets, including the South (-0.3%), Southwest (0.0%), and Southeast (+1.8%), display resilience, contrasting sharply with northern markets, which are down by 7% to 8%. Reefer and flatbed rates also highlight this trend, with the South performing significantly better. As mid-year financial pressures loom, June’s demand spike could be pivotal for market recovery. The report suggests a potential balance return, especially with southern regions showing strength.

TOGETHER WITH LEVITY

Levity helps fast-moving 3PLs and freight brokers to do more with less by automating the most time-consuming and repetitive email tasks.

Whether it's spot quoting, load building, or answering track-and-trace requests, Levity connects to your inbox, TMS and other tools like rating engines, extracting the right information no matter the language or format. It performs tasks on your behalf automatically in the background so you can save time and focus on building shipper relationships instead of data entry. Learn more on Levity.ai today.

Retailers Address Grocery Problem, Cargo Theft in Q1 2024 Earnings Reports

Looking at Q1 2024 earnings reports from major retailers, it's clear that the landscape is varied. Here's a summary of how Amazon, Walmart, Target, Best Buy, Dollar General, and Nordstrom fared, alongside some insights on the implications for freight demand and rising cargo theft.

Amazon

• Revenue: $143.3 billion, beating expectations.
• Earnings Per Share (EPS): $0.98, beating the estimated $0.83.
• Sales: Up 13% year-over-year. Amazon expects continued growth in Q2 but at a more moderate pace.

Walmart

• Revenue: $161.5 billion, surpassing estimates.
• EPS: $0.60, higher than the expected $0.52.
• Same-store Sales: Increased by 3.8%. Walmart saw significant gains driven by strong e-commerce sales (up 22% YoY)​. Post-report, the shares soared "to a record high in their biggest one-day gain in four years."

Target

• Revenue: $24.14 billion, slightly below the forecasted $24.52 billion.
• EPS: $2.03, above the estimate of $2.00.
• Same-store Sales: Declined by 4.8% compared to last year. Target struggled with lower consumer spending and higher operational costs, impacting its bottom line​.

Best Buy

• Revenue: $8.85 billion, slightly above expectations.
• EPS: $1.20, beating the forecasted $1.08.
• Same-store Sales: Fell by 6.3%. Best Buy's performance was dampened by weaker demand for electronics, reflecting a broader industry trend​.

Dollar General

• Revenue: $9.91 billion, meeting estimates.
• EPS: $1.65, surpassing the expected $1.56.
• Same-store Sales: Grew by 2.4%. Dollar General benefited from increased consumer traffic and strategic expansion of its product lines.

Nordstrom

• Revenue: $3.34 billion, slightly above estimates.
• EPS: $-0.39, way above expected $-0.07.
• Same-store Sales: Decreased by 7.9%. Nordstrom faced challenges with inventory management and softer demand for luxury items​. Plus, Nordstrom's earnings call mentioned that "external theft in their transportation network" impacted their gross margin. This might be related to the rise in sophisticated cargo theft via rail that the Journal of Commerce reported on.

Grocery Price Adjustments and Their Impact

This summer, major grocery retailers like Amazon, Walmart, and Target are planning a big discount to groceries. After raising prices too high, leading to lowered sales, these retailers are now adjusting to attract more customers. This strategy aims to offset recent sales declines and boost foot traffic in their stores.

• Amazon has reduced prices on around 1,500 food items and plans to reduce prices on a total of 5,000. The company has also launched a discount household goods brand called Dealworthy.
• Walmart has increased its number of "rollbacks" by 45% YoY.
• "The research firm eMarketer projects Walmart will capture the highest percentage of digital grocery sales this year, at 27%. Amazon is projected to capture 18.5% of sales — totaling $40.5 billion — in 2024, according to eMarketer."
• Aldi's has made similar announcements, too, cutting prices on over 250 items.

Implications for Freight Demand

As these retail giants adjust their pricing strategies and manage inventory levels, we can expect fluctuations in freight demand.

Discounted groceries and increased consumer spending during summer typically result in higher volumes of goods being transported.

This uptick, combined with strategic inventory restocking, could provide a much-needed boost to the freight industry heading into the second half of the year.

Sources: Reuters | Investors.com | Walmart | Target | Best Buy | Dollar General | Nordstrom/Chain Store Age

TOGETHER WITH ISO: Watch out! These key markets saw the biggest service drop-offs across the ISO* network over the past month.

*Isometric Technologies' (ISO) Service Index helps brokers scorecard, benchmark, and source by service level performance across their customer and carrier network. ISO Scores are a composite of OTD, OTP, and Bounce Rates.

🌎 AROUND THE FREIGHT WEB

💸 Small Fleets Face Financial Challenges. Despite an optimistic outlook, Ted Johnson reports a modest 0.84% profit margin for May and a year-to-date profit margin of 3.03% for his small trucking fleet, with significant expenses in fuel (30.74%) and wages (28.10%).

⛽ U.S. Diesel Demand Drops. March saw the lowest U.S. diesel demand in 26 years, meaning potential risks to broader oil demand.

📉 Dow Transports Struggle. The Dow Jones Transportation Average lags behind other indexes, acting as a barometer for economic slowdown with its 5% drop this year.

🚚 NYC Congestion Fee Lawsuit. The Trucking Association of New York sues to stop a Manhattan congestion fee they argue unfairly targets truckers.

🚛 FMCSA Grants Waivers. FMCSA issues new waivers for truck drivers with past epilepsy or hearing impairments, ensuring they meet safety standards.

🎣 THE FREIGHT CAVIAR PODCAST

In this week's The FreightCaviar Podcast, we interviewed Bill Loupée, a produce shipper. Bill shared insights from his career, the effectiveness of freight broker pitches, and challenges in produce logistics. He discussed market trends predicting a 20% uptick in freight rates, the volatility of fragile commodities, and the importance of effective communication.

Listen to the entire interview on Apple Podcasts, Spotify, or YouTube.

FREIGHT MEME OF THE DAY

Also, check out:

• 🎧 The FreightCaviar Podcast. Listen to this week's podcast on Spotify & Apple Podcasts.
• Want to get your brand noticed by freight brokers? FreightCaviar can help. Work with us to get your services featured in our newsletter, podcast, and more. Plus, we write great articles about what you do. Get in touch with Paul at pbj@freightcaviar.com to learn more.